Nuclear deal appears to help Iran’s car making industry

Business Materials 22 December 2016 16:25

Baku, Azerbaijan, Dec. 22

By Farhad Daneshvar – Trend:

The latest statistics on Iran’s automotive industry indicate a considerable surge in the country’s largest non-oil sub-sector of economy in the post sanctions era.

The industry’s output over the first eight month of the current fiscal year (starting March 20) surpassed 820,000 vehicles indicating a 35.9 percent growth year-on-year.

In the meantime, the country produced 759,871 passenger vehicles - 52,129 pickups - 616 busses and mini trucks as well as 7,353 trucks. Over the mentioned period, the production of passenger vehicles witnessed a 138-percent growth.

Coming to other vehicles, the output of pickups over a period of one month between October 22 and November 21 has increased by 76 percent, with buses growing by 22 percent.

Mini buses, however, experienced 46 percent fall in the period of one month as only 33 mini busses were produced compared to 62 ones in the same period of last year.

Taking into account the considerable growth in the country’s vehicle output, it seems that the last year’s historic nuclear deal which was implemented Jan 16 has, so far, had a positive impact on the industry as there are indications suggesting that the country’s car market is climbing out of a deep recession.

According to the country’s economic development plan, Iranian carmakers are expected to produce three million cars per year by 2025.

In the meantime, the car part makers are projected to make $25 billion worth of car parts and export $6 billion worth of car-related products.

However, there are still some concerns to be addressed in particular some issues regarding car part making sphere.

An Iranian car part maker has earlier called for immediate investment in the industry, describing the situation as “dire”.
Arash Mohebinezhad, the secretary of an Iranian union of car spare parts makers, has said the country needs to invest two billion euros over the next one year to help the industry survive.

Car part makers complain that the domestic investors are reluctant to put money in the car part making industry due to the dire situation of the producers.

On the other hand, lack of funds has made the producers ignore the needs for increasing their technical knowledge and improving their equipment.

The 12-year sanctions have inflicted a serious harm to Iran’s automotive industry causing Iranian producers to lag behind their rivals.

Nevertheless, a handful of deals with international manufacturers aimed at renewing Iran’s automotive industry have kept alive the hopes that the country’s second largest sub-sector of economy will again turn into a modernized industry.

On Thu, Dec 22, 2016 at 3:53 PM, Konul <[email protected]> wrote: